Putting the scrapbox in approval would make it too similar to Progressing Hacks, except with much lower quality threads. If we put it on approval, we would have to get some standards and I'm sure most of the threads there (as in 90%) wouldn't pass the mod filter.
And adding a specific mod for the scrapbox wouldn't really help that much since: a) Mods can't be on 24/7 so spam would still be growing there when he couldn't be there, b) He would feel a bit left out, since he'd be a mod with control over just one board while all the other rom-hacking mods have around 6 boards under their control. Not to mention that they could still be moderating the Scrapbox, leaving him jobless. I agree with adding a new mod for Rom-Hacking as a whole though.
And finally, because the original idea for the scrapbox was completely different to what the board is nowadays, so we can basically say it failed its original purpose, and thus why we are removing it. The spam is not just the only reason, just the main symptom of the failure.